TTAB - Trademark Trial and Appeal Board - *1 AVIA GROUP INTERNATIONAL, INC. v. MICHEL FARAUT Cancellation No. 19,382 December 16, 1992

Trademark Trial and Appeal Board

Patent and Trademark Office (P.T.O.)

 

*1 AVIA GROUP INTERNATIONAL, INC.

v.

MICHEL FARAUT

Cancellation No. 19,382

December 16, 1992

Issued: November 10, 1992

 

Before Rice, Simms and Quinn

 

 

Members

 

 

By the Board:

 

 

J.E. Rice, R.L. Simms and T.J. Quinn

 

 

Members

 

 

 This case now comes up on respondent's motion, filed September 2, 1992, to dismiss the petition for cancellation or, in the alternative, to add Reebok International Ltd. as a party plaintiff, to amend respondent's answer to assert equitable defenses and to reopen discovery.

 

 

 The essence of respondent's motion is that petitioner failed, in its responses to respondent's interrogatories, to disclose that petitioner is a wholly owned subsidiary of Reebok International Ltd. (Reebok). [FN1] Respondent learned that petitioner is a wholly owned subsidiary of Reebok through two magazine articles and one newspaper story petitioner submitted into evidence through a notice of reliance. Because Reebok is petitioner's parent corporation, applicant concludes that Reebok is the real party in interest, thereby raising new procedural and substantive issues, such as which company controls the quality of petitioner's goods.

 

 

 The instructions preceding respondent's interrogatories defined petitioner as Avia Group International, Inc. and all partners, parents, subsidiaries or associated organizations. The instructions also stated that where an interrogatory "... [d]iffers as between Petitioner and such company, division, corporation, partnership or business entity, or is applicable only to one of them, the answer shall so state and shall set forth such difference and shall state separately all information applicable to Petitioner and all information available to each such company, division, corporation, partnership, or business activity."

 

 

 Because petitioner failed to disclose its relationship with Reebok, respondent argues that Trademark Rule 2.120(g) and Fed.R.Civ.P. 37(b)(2) provide that judgment may be entered against petitioner.

 

 

 Respondent argues that petitioner is guilty of unclean hands because petitioner and Reebok are acting in concert to monopolize and/or restrain trade in violation of the antitrust laws and the law of unfair competition. Respondent asserts that petitioner and Reebok are misusing petitioner's trademark registrations by trying to eliminate respondent as a competitor under the pretense of a cancellation proceeding. Therefore, respondent concludes that petitioner should be precluded from relying on its registrations.

 

 

 Petitioner filed a brief in response to respondent's motion and a motion for sanctions under Fed.R.Civ.P. 11. First, petitioner argues that respondent has no basis for moving for judgment because Trademark Rule 2.120(g) only applies if a party has failed to comply with an order of the Board and petitioner has complied with all relevant orders of the Board.

 

 

 According to petitioner, it is a matter of public record that petitioner is a wholly owned subsidiary of Reebok. However, that information is not relevant in this proceeding. Petitioner argues that it is petitioner, not Reebok, who owns the AVIA marks and, therefore, has standing. Petitioner asserts that in the development and design of products, promotion and advertising, and distribution and marketing, petitioner is separate and apart from its corporate parent. Petitioner asserts that even if petitioner had disclosed that Reebok was petitioner's parent corporation, petitioner would not have changed any of its responses to respondent's discovery requests.

 

 

  *2 Petitioner argues that respondent has provided no factual or legal basis for its allegations of antitrust or unfair competition allegations.

 

 

 Petitioner argues that Reebok should not be joined as a party plaintiff because Reebok does not have standing nor any reason to petition to cancel respondent's registration.

 

 

 Respondent's motion to dismiss the petition for cancellation or, in the alternative, to join Reebok as a party plaintiff, to amend respondent's answer and to reopen discovery is not well taken. Respondent has failed to persuade us that petitioner willfully failed to disclose that petitioner is a wholly owned subsidiary of Reebok. The adequacy of an interrogatory answer will not be governed by the introductory instructions or preamble. Moreover, a review of respondent's interrogatories fails to reveal which interrogatory required petitioner to disclose its relationship with Reebok. In its motion, respondent did not indicate which interrogatory required that information.

 

 

 We note that respondent did not request any information regarding who controlled the nature the and quality of the goods sold under petitioner's marks. Respondent did not take any discovery depositions and failed to attend the testimony depositions of petitioner's witnesses.

 

 

 Respondent did not plead that Reebok controls the quality of the goods sold under petitioner's marks. Petitioner's registrations are owned by petitioner and as indicated in the affidavit of John Barrows "... [i]n the areas of product development and design, promotion and advertising and distribution and marketing, petitioner operates separately and apart from Reebok."

 

 

 Further, the issue in a proceeding such as this is what rights petitioner has in its pleaded marks vis-a-vis the defendant, not what rights anyone else may have in it. Thus, for example, an exclusive licensee may be the plaintiff in an opposition or cancellation proceeding before the Board. There is no requirement in that case that the licensor also be joined as a party plaintiff.

 

 

 Insofar as respondent asserts that petitioner and Reebok have misused petitioner's registrations to violate the antitrust laws and law of unfair competition, there is nothing in respondent's proposed pleading to suggest that petitioner has done anything other than seek to protect its rights in its registered marks, and preclude the registration of what it believes to be a confusingly similar mark, a right which every trademark owner possesses under the Lanham Act. Cook's Pest Control, Inc. v. Sanitas Pest Control Corporation, 197 USPQ 265 (TTAB 1977). See: McDonald's Corporation v. Hardee's Food Systems, Inc., 195 USPQ 63 (NDIll1976); Tony Lama Company, Inc. v. Anthony Di Stephano, 206 USPQ 176 (TTAB1980); and VIP Foods, Inc. v. V.I.P. Food Products, 200 USPQ 105 (TTAB1978).

 

 

  *3 In view thereof, respondent's motion to dismiss the petition for cancellation or, in the alternative to join Reebok as a party, to amend respondent's answer and to reopen discovery is denied.

 

 

 We now turn to petitioner's motion for sanctions under Fed.R.Civ.P. 11. Petitioner argues that respondent's conduct has been dilatory and that respondent has manufactured delays without regard for the Federal Rules of Civil Procedure, the Trademark Rules of Practice, case law and the specific orders of the Board in this proceeding. Petitioner supported its argument by providing an outline of the prosecution of this proceeding.

 

 

 In response to petitioner's motion for sanctions, respondent argues that petitioner has distorted the prosecution of this case in order to create a false impression that respondent has been dilatory and that petitioner is using this proceeding to exhaust the respondent's resources in order to eliminate respondent as a competitor.

 

 

 Respondent's conduct in this proceeding may be characterized as dilatory and lacking in good faith. Listed below are some examples of respondent's conduct herein:

   1. Respondent failed to timely serve petitioner with his responses to petitioner's discovery requests.

   2. When respondent did serve his responses to petitioner's discovery requests, the responses included objections in spite of the fact that the Board ordered respondent to answer fully and without objection.

   3. Respondent served two sets of interrogatories that exceeded the numerical limitation set forth in Trademark Rule 2.120(d)(1).

   4. Respondent's motion for a protective order relieving respondent from attending a deposition by oral examination and to compel petitioner to take respondent's deposition by written question was unnecessary.

   5. Respondent's motion to compel petitioner to attend a discovery deposition in New York or New Jersey was without any legal or factual basis.

   6. In response to respondent's request for reconsideration filed on August 28, 1991, the Board reopened the discovery period, at respondent's request, to allow respondent to notice and take petitioner's discovery deposition. Petitioner did not notice or take petitioner's deposition.

   7. In response to petitioner's motion for sanctions filed on September 3, 1991, respondent filed a motion to reopen discovery on the grounds that respondent did not receive the original trial order. The Board noted that petitioner had "faxed" a copy of the trial order to respondent on April 29, 1991 and, therefore, respondent had the trial order for 59 days before the end of discovery and had not filed a motion for an extension of discovery on the ground that he had not received a copy of the original trial order.

   8. Respondent filed a motion for summary judgment after the close of petitioner's testimony period.

   9. Respondent's request for reconsideration from the Board's order striking respondent's motion for summary judgment was without any legal or factual basis.

    *4 10. Respondent's current motion to dismiss the petition for cancellation or, in the alternative, to join Reebok, to amend respondent's answer and to reopen discovery is without merit.

 

 

 It is our view that respondent has followed a pattern of filing baseless and unnecessary motions and has failed to follow Board practice and procedure which has unnecessarily delayed this proceeding and raised the cost of this litigation. Accordingly, petitioner's motion for sanctions is granted to the extent that respondent is precluded from filing any further motions without first requesting leave to file the motion.

 

 

 In moving for leave to file a motion, respondent must clearly and concisely set forth the factual and legal basis for respondent's proposed motion.

 

 

 Remaining trial dates are reset below. In view of the preceding decision, respondent will be allowed no extensions of its testimony period without petitioner's consent or a showing of extraordinary circumstances. [FN2]

 

 

 

THE PERIOD FOR DISCOVERY TO CLOSE                                        Closed

Testimony period for party in position of plaintiff to close             Closed

(opening thirty days prior thereto)                                             

Testimony period for party in position of defendant to close  December 20, 1992

(opening thirty days prior thereto)                                             

Rebuttal testimony period to close                             February 3, 1993

(opening fifteen days prior thereto)                                            

 

 Briefs shall be filed in accordance with Rule 2.128(a) and (b).

 

 

 An oral hearing will be set only upon request filed as provided by Rule 2.129.

 

 

J.E. Rice

 

 

R.L. Simms

 

 

T.J. Quinn

 

 

Members, Trademark Trial and Appeal Board

 

 

FN1. Respondent also alleges that petitioner failed, in its responses to an interrogatory asking for its business locations, to identify one of its business locations in Colleyville, Texas. John Barrows, petitioner's Vice-President of Marketing, submitted an affidavit in response to respondent's motion. Mr. Barrows explained that petitioner's listing in Colleyville, Texas is the residence of Jim Hoff, petitioner's sales director for its National Accounts West. Mr. Barrows stated that even if petitioner had been aware of the listing in Colleyville, Texas, petitioner would not have changed any of its responses to respondent's interrogatories. Accordingly, the Board finds that petitioner did not willfully fail to disclose discoverable information.

 

 

FN2. If respondent files a request for reconsideration from this order or a petition to the Commissioner, the Board will not suspend proceedings pending the disposition of the request for reconsideration or the petition. If the request for reconsideration or petition is denied and respondent has not taken testimony or offered any other evidence, respondent runs the risk that his testimony period will have expired.

 The filing of a request for reconsideration or a petition to the Commissioner from this order will not be considered extraordinary circumstances.

 

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